(PUB) Investing 2016

12

Stocks Hit New Highs Market Overview | Andrew Daniels

Benchmark Performance

Total Return % Through

A N N U A L I Z E D

07-31-16

1Mo

YTD

3Yr

5Yr

10Yr

Large Growth Large Blend Large Value

5.0 3.7 3.3 4.6 4.2 3.9 5.7 5.0 4.9 3.1 1.9 2.6 3.1 3.9 4.7 6.7 2.3

2.9 5.9 7.4 4.6 7.1 9.0 4.9 8.1 9.8 5.9 6.3 5.9

10.3

11.4 11.4 10.8

8.0 6.8 5.7 7.7 7.1 7.1 7.7 6.8 6.5 5.0 4.7 5.5 5.7 1.6 3.2 0.1 1.0 6.6 9.8 7.2 7.7 9.3 7.2 3.9 3.5 2.7 1.8 3.3 0.7 5.4 3.2 4.8 4.8 3.2 1.8 1.8 6.1 3.6 4.7 4.4 4.5 4.9 7.6 5.0 2.4

8.9 7.3 7.6 7.0 7.3 6.1 5.8 5.5 5.8 4.2 5.6 8.2 4.2 7.6

Mid-Cap Growth Mid-Cap Blend Mid-Cap Value

9.7

10.0 10.4

Stocks climbed to new highs in July. The S & P 500 gained 3 . 7% and the Russell 2000 Index gained 6 . 0% as the reaction to recent economic data and second-quarter earnings has been positive. As expected, the Federal Reserve left short-term interest rates unchanged at its July policy meeting. The small-blend Morningstar Category outperformed the large-blend category in July. DFA US Small Cap DFSTX , with a Morningstar Analyst Rating of Gold, rose 5 . 0% , while Gold-rated Vanguard Large Cap Index VLACX rose 3 . 8% . Technology was the top-performing sector in July, gaining approximately 8% . The sector was lifted by better-than-expected earnings from Apple AAPL , Microsoft MSFT , Facebook FB , and Alphabet GOOG . Consumer discretionary stocks also posted solid results in July—online retailer eBay EBAY rose more than 30% while General Motors GM rose more than 11% . After gaining for most of the year, Brent crude prices fell 14 . 5% in July, ending the month at $42 . 46 per barrel, as excess supply concerns resurfaced. Hence, energy was the worst-performing sector in July. Neutral-rated Vanguard Energy lost 1 . 1% . The dividend-heavy utilities and consumer staples sectors also took a breather in July, falling 0 . 8% and 0 . 4% , respectively. Overseas markets also posted gains in July. The MSCI EAFE Index gained 5 . 1% —shaking off the June Brexit vote—and is now in the black for the year. Austrian, Spanish, and German stocks all gained more than 6% , while U.K. stocks rose 2 . 6% . Emerging-markets stocks gained 5 . 0% in July, led by Brazil’s 10% gain, South Africa’s 9% gain, and Czech Republic’s 8% gain. Turkish stocks fell 6% after a failed military coup. K Contact Andrew Daniels at andrew.daniels@morningstar.com

Small Growth Small Blend Small Value

9.3 9.4 9.4 7.1 5.1 6.9 8.9 8.8 7.3

Allocation--70% to 85% Equity Allocation--30% to 50% Equity Allocation--50% to 70% Equity

Communications

11.6 -1.5 11.1 -3.5 17.2

Financial

Global Real Estate

Health

14.2 -4.3

17.8 -4.5 -10.3 11.8 11.6 10.4 13.3 12.3 10.4

11.8

Natural Resources

Equity Precious Metals

9.7 114.6

7.8

Real Estate Technology

3.9 7.5

14.8

13.3 13.2

5.2

Utilities

-0.2

19.3

9.0

S&P 500

3.7 4.3 5.9

7.7

11.1

S&P MidCap 400

12.6

9.9 6.8

Russell 2000

8.4

Diversified Pacific/Asia Diversified Emerging Mkts

4.0 4.2 3.6 4.3 4.2 4.1 4.6 5.1 4.1 4.2 5.4 4.0 4.2 5.4 6.6

6.2

5.2

4.0

10.8 -2.0

-0.4

-2.3

Europe Stock

1.4 1.5 3.0 0.3 5.1 3.5 5.3

3.5 2.3 3.7 1.5 5.8 3.4 6.6

Foreign Large Blend Foreign Large Growth Foreign Large Value

1.1 1.9 1.0 1.5 3.7 4.5

Foreign Small/Mid Growth Foreign Small/Mid Value

World Stock

MSCI World

4.9

6.6

7.9

MSCI Emerging Markets

13.4

-0.4

-3.2

MSCI EAFE MSCI Europe

0.9

1.6 0.9

2.9 2.6

-1.2 30.7

MSCI Latin America

-8.8

-11.1

-0.2

MSCI Pacific

3.5

3.8

3.9

High Yield Bond

2.2 0.7 0.9

8.7 5.9 5.8 4.4 7.8

3.0 1.2 3.8 6.3 2.1 4.2 4.4 5.9

4.9 1.0 3.5 5.5 1.7 3.5 6.0 5.1

Inflation-Protected Bond Intermediate-Term Bond

Muni National Long

-0.1

World Bond

1.2

BarCap US Agg Bond TR USD BofAML US HY Master II TR BarCap Municipal TR USD

0.5 2.5 0.1

5.9

12.1

4.4